IRS Halts Implementation on Crypto Tax Rule

The Internal Revenue Service (IRS) will not require US businesses to file reports on transactions exceeding $10,000 until it establishes a legal framework.

The IRS explained that the decision came after the U.S. Treasury Department and the IRS revised the Infrastructure Investment and Jobs Act (IIJ Act). Let’s explore more about it.

Implementation of Crypto Tax Rule Halted by IRS

The IRS and Treasury said in a joint statement: “Businesses… do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations. This particular provision requires the Treasury and the IRS to issue regulations before it goes into effect.”

At the start of the year, the IRS enforced a new rule demanding crypto users report transactions exceeding the $10,000 limit. However, the regulator faced backlash from the crypto community. Many complained of a lack of guidelines from the IRS, which would make it difficult to comply.

When will this Law be implemented?

Although the new crypto tax law is theoretically due to take effect this year, policy and tax experts have stated that it will be implemented after an extensive public comment and review procedure that can often last years.

The Treasury and the IRS hinted at releasing regulations about the reporting of digital assets. However, they did not offer any timeline for such policies. As expected, the crypto community reacted positively to the new announcement.

The Blockchain Association said the news was a “positive step forward.” Interestingly, the U.S. House Financial Services Committee also supported the “stopgap action.” In addition, the commission emphasized that the “poorly constructed digital asset reporting requirements” had several fundamental issues.

Some of the questions about the law include privacy concerns. The law states that an American receiving more than $10,000 in cryptocurrency during “trade or business” must disclose the identity of the person who provided them the money.

Users who receive funds from DAOs could face difficulties providing the details of an individual payer they know. Crypto users believe the tax reporting requirements could endanger the concept of decentralization.

Crypto businesses are somewhat relieved by the temporary halt, but crypto policies in the US remain uncertain. So, crypto businesses are still faced with uncertainty. There’s no doubt that continuous dialogue between crypto stakeholders and the US government is the only path to crafting favorable policies.

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.


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